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									<h3>Overview</h3>
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										<p>Managed care is a set of contractual and management methods partnered with health care providers and medical 
										facilities in providing medical services at reduced costs and improved quality care. It is a set of techniques 
										and concepts used in financing and delivering health-related services to members enrolled under the system. 
										It is believed to reduce health care expenditures by offering the ability to acquire significant lower costs 
										by contracting for large volumes of physician, laboratory, pharmacy and hospital services.</p>

										<p>The Managed Care segment covers organizations that provide Healthcare Protection Services (Insurance). 
										The nature of such business involves benefits in terms of funding coverage when availing to an array of 
										healthcare related benefit types (e.g. Medical, Pharmaceutical, Dental, Behavioural and Mental Health, etc.).  </p>

										<p>The rise for both healthcare and employee benefits costs has been the primary trigger for the development 
										of managed care.  As traditional corporate health insurance, Medicare and Medicaid were open-ended entitlement 
										systems, managed care gave way to physicians, hospitals and insurers to benefit from increased spending.
										Due to cost shifting, businesses started on turning to contractors to stabilize expenses, even it means having
										to face client complaints. Managed care provided an organizational structure to the nation in controlling
										health care delivery to improve efficiency and limit the total health care expenditures. </p>

										<p>The Healthcare Benefits Management business started during mid-1800 period in a form where workers are paid 
										for lost wages in cases where an injury was work related (Essential of Managing Healthcare, 2007, Kongstvedt; 
										Healthcare USA, 2012). As the industry matures, it had subscribed into a standard insurance model wherein 
										coverage are extended further to other incidental health expenses outside work. Though adopting some concepts of 
										insurance, the healthcare is quite peculiar as normally insurance covers for low probability incidents while in 
										the case of healthcare insurance some areas of coverage maybe discretionary and predictable. This approach was 
										pioneered and popularized by Blue Cross enabling the extension of the access (mostly up to middle class) to
										expensive healthcare benefits. </p>

										<p>The rising enrolment as a result of Blue Cross' offering had driven enrolment upwards and from which had 
										been very difficult to control. By 1970s, the industry made an introduction to Health Management Organization (HMO).
										HMO integrates healthcare providers and insurers - such organization employs or manages the health services 
										providers and thus providing better control, fraud deterrence, and proper costing. Today the operating model 
										to that of a Managed Care (HMO) Organization had been used as a standard for Healthcare related insurance. </p>
										
										<p>Managed care basically differs from the conventional medical practice in that the transaction between 
										the physician and the patient is monitored and controlled by a manager.  In Managed Care Organization (MCO), 
										contracts with hospitals and physicians are made by insurance companies, creating a network of providers. This 
										type of network is known as the Preferred Provider Organization (PPO) which limits the services received by 
										insurance beneficiaries to doctors and hospitals that are within the network only. To ensure the control of costs 
										and services given to recipients, gatekeeping is done by requiring referrals or authorization from physicians,
										acting as managers, for special services such as hospitalization and surgery. Financial risks are also controlled
										through capitation, which involves paying for the number of people enrolled rather than the number of services 
										offered, and withholds, wherein a percentage of the amount paid for a particular medical service goes into a 
										withhold pool to help compensate for any unforeseen extra volume above the projected expenditures. </p>
										
										<p>Other cost control methods used by MCOs in controlling cost and utilization are second opinion, precertification, 
										pre-admission testing, concurrent review, database profiling, intensive care management, generic substitution, 
										discharge planning, retrospective review and audits. In second opinion, the findings and recommendations by 
										the initial doctor must be reviewed and affirmed by a second doctor before treatment is done. Before conducting
										special medical treatment and procedures, the need for such procedures are evaluated and approved by the 
										insurance company in advance. This process is involved in precertification. On the other hand, in pre-admission
										testing, reviews and tests are done on the patient prior to admission. This is to avoid longer days the patient
										has to stay in the hospital. In concurrent review, a case control nurse does regular evaluations for the 
										authorization of continued or extended in-patient admission and other additional procedures. Database profiling 
										involves the use of graphs and charts, which show the number of services used by every 1,000 patients for 
										each physician or hospital, in identifying whatever unbalanced utilization of services there is. In intensive 
										case management, any projected case to amount to more than $10,000 is monitored and managed by a nurse in
										the insurance company. Generic substitution involves providing less expensive generic drug as prescription 
										to patients over a brand-name drug, taking into account that FDA considers the two as equivalent. In 
										discharge planning, facilitation of immediate home transfer is done by a social worker where he/she meets 
										with the patient and patient's family. An evaluation is done in retrospective review after discharge of the 
										patient from the hospital to ensure the avoidance of payment accountability for any unnecessary medical services.
										Audits are done by a representative from the insurance company to warrant the delivery of all billed services. </p>
										
										<p>Generally, managed care plans are categorized as Health Management Organization (HMO) Plans, Preferred 
										Provider Organization (PPO) Plans, and Point of Service (POS) Plans. In HMO, members pay a fixed monthly 
										fee, regardless of the expenses to be incurred for necessary medical services in a particular month. 
										Members are allowed to use the services and facilities offered by health care providers within the HMO 
										network only for the cost to be covered. If outside the network, members are obliged to pay the bill. In PPO, 
										enrollees are authorized to stay within the network of health care providers. The company makes contracts with 
										a network of health care providers, typically under a fee-for-service agreement. Outside of the network, the 
										enrollees pay for the fees. PPO members pay for the medical services as they were given, instead of paying ahead.
										The member is being reimbursed by the PPO insurance company with the expenses incurred for the services,
										excluding any co-payments made. In other instances, the insurance company directly pays the amount to the
										physician after the bill was submitted, and the member covers for the co-payment amount he/she has made. 
										Fundamentally, POS plans function with combined characteristics of HOM and PPO plans. Usually, POS plans 
										function similarly with HMO plans as you are allowed to choose a physician within the network who manages
										your medical services.  The use of providers outside of the network is allowed, however the beneficiary has
										to cover for the expenses given. As the name itself suggests, every time the beneficiary needs medical
										services (the period or "point of service"), he/she has the option to accept care within the network allowing 
										to be managed by the primary care physician (PCP) or accept care outside of the network on his/her own terms
										without a recommendation from the PCP. How you and your family access and receive health care and the cost
										you have to pay out every time you receive care may be determined by the type of managed care plan you have. </p>
										
										</br></br></br>
										
										<h3>References</h3>
										
										<strong>Managed Care - The HMO Revolution (Chapter 10)</strong>
										</br><strong>Health Care Economics</strong>
										</br><strong>Financing Health Care (Chapter 7)</strong>
										</br><strong>Health Care USA </strong>
										</br></br>
										
										<p><strong>Managed Care</strong>
										</br><a href="http://en.wikipedia.org/wiki/Managed_care" target="_top">
										http://en.wikipedia.org/wiki/Managed_care </a></p>
										
										<p><strong>Managed Care Organization (MCO) Law & Legal Definition </strong>
										</br><a href="http://definitions.uslegal.com/m/managed-care-organization-mco/" target="_top">
										http://definitions.uslegal.com/m/managed-care-organization-mco/</a></p>
										
										<p><strong>Managed Care </strong>
										</br><a href="http://legal-dictionary.thefreedictionary.com/Managed+Care+Organization" target="_top">
										http://legal-dictionary.thefreedictionary.com/Managed+Care+Organization</a></p>
										
										<p><strong>Managed Care - Understanding Managed Care</strong>
										</br><a href="http://healthinsurance.about.com/od/understandingmanagedcare/a/managed_care_overview.htm" target="_top">
										http://healthinsurance.about.com/od/understandingmanagedcare/a/managed_care_overview.htm</a></p>
										
										<p><strong>Types of Managed Care Plans </strong>
										</br><a href="http://www.aarphealthcare.com/insurance/managed-care-plans.html" target="_top">
										http://www.aarphealthcare.com/insurance/managed-care-plans.html</a>
										</br><a href="http://www.healthychildren.org/English/family-life/health-management/health-insurance/Pages/Types-of-Managed-Care-Plans.aspx" target="_top">
										http://www.healthychildren.org/English/family-life/health-management/health-insurance/Pages/Types-of-Managed-Care-Plans.aspx</a>
										</br><a href="http://ocw.jhsph.edu/courses/managedcare/PDFs/MC%20FACT%20SHEET.pdf" target="_top">
										http://ocw.jhsph.edu/courses/managedcare/PDFs/MC%20FACT%20SHEET.pdf</a></p>
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													<h3 id="sidebar-content-header">Cost Control Methods Used </h3>
													<ul>
														<li><strong>Gatekeeping</strong> - this is done by requiring referrals or authorization from physicians, acting as managers, for special services such as hospitalization and surgery to ensure the control of costs and services given to recipients.</li>
														<li><strong>Capitation</strong> - method used to control financial risks, which involves paying for the number of people enrolled rather than the number of services offered.</li>	
														<li><strong>Withholds</strong> - method used to control financial risks, wherein a percentage of the amount paid for a particular medical service goes into a withhold pool to help compensate for any unforeseen extra volume above the projected expenditures.</li>
														<li><strong>Second opinion</strong> - under second opinion, the findings and recommendations by the initial doctor must be reviewed and affirmed by a second doctor before treatment is done.</li>
														<li><strong>Precertification</strong> - in precertification, before conducting special medical treatment and procedures, the need for such procedures are evaluated and approved by the insurance company in advance.</li>
														<li><strong>Pre-admission Testing</strong> - reviews and tests are done on the patient prior to admission. This is to avoid longer days the patient has to stay in the hospital.</li>
														<li><strong>Concurrent review</strong> - a case control nurse does regular evaluations for the authorization of continued or extended in-patient admission and other additional procedures.</li>	
														<li><strong>Database Profiling</strong> - involves the use of graphs and charts, which show the number of services used by every 1,000 patients for each physician or hospital, in identifying whatever unbalanced utilization of services there is.</li>
														<li><strong>Intensive case management</strong> - any projected case to amount to more than $10,000 is monitored and managed by a nurse in the insurance company.</li>
														<li><strong>Generic Substitution</strong> - involves providing less expensive generic drug as prescription to patients over a brand-name drug, taking into account that FDA considers the two as equivalent.</li>
														<li><strong>Discharge Planning</strong> - facilitation of immediate home transfer is done by a social worker where he/she meets with the patient and patient's family.</li>
														<li><strong>Retrospective Review</strong> - evaluation is done after discharge of the patient from the hospital to ensure the avoidance of payment accountability for any unnecessary medical services.</li>	
														<li><strong>Audits</strong> - are done by a representative from the insurance company to warrant the delivery of all billed services.</li>
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                                    <h3>Organization</h3>
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													<p>Worldwide, a variety of different large organizations are involved in providing health care services,
													brought about by the evolution of managed care. These organizations are built up under a complex governance 
													or organizational structure, comprising the work force.  No specific standardizations are imposed in the
													organizational structure of managed care, though there are a few exceptions, for instance, a plan may have
													a board of directors, and their corresponding functions may or may not vary. The exceptions are the board
													make-up for cooperatives (co-ops), for non-profit companies and the ownership and governance requirements
													for Consumer Operated and Oriented Plans (CO-OPS). Depending on the type and ownership of the organization 
													and the motivation and set of skills of the people involved, the functions of the key managers and the 
													committees vary. Generally, the following groups, committees and individuals, with their corresponding 
													functions, are involved in the organizational structure of managed care organization:</p>
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														<li><a href="https://sites.google.com/a/pointwest.com.ph/hmc-domain-website/industrysegments-managedcare/board-of-directors" target="_top">Board of Directors </a></li>
														<li><a href="https://sites.google.com/a/pointwest.com.ph/hmc-domain-website/industrysegments-managedcare/key-management" target="_top">Key Management Positions </a></li>
														<li><a href="https://sites.google.com/a/pointwest.com.ph/hmc-domain-website/industrysegments-managedcare/medical-management" target="_top">Medical Management Committees </a></li>
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										<p>A managed care organization (MCO) is an organization that provides health care services to the beneficiaries through 
										managed care health plans. The MCO is affiliated with a network of service providers such as physicians, laboratories,
										hospitals and other health-related institutions and practitioners. It usually delivers health care services through a 
										defined medical service provider and defined products and services. </p>

										<p>In some instances, managed care beneficiaries are required to choose or are designated with a primary care physician (PCP).
										The beneficiary contacts the PCP whenever there is a need for any health care service. Treatment can be done by the 
										PCP or he/she may refer the insured to a medical practitioner within the network. Outside the network, insurance
										coverage is not applicable, unless a PCP referral is obtained.</p>
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										<img class="img-responsive center-block" src="../img/multipartyrelationship.png" />
										</br>
										
										<p>Figure 5 illustrates the relationship exhibited by the parties involved in health care servicing transactions. 
										The MCO acts as the middleman between buyers (consumers) and sellers (service providers). It facilitates transactions 
										and exchanges between buyers and sellers ensuring the satisfaction of both parties as seen and measured by outcomes 
										over cost. Moreover, consumers access health care providers for the benefit packages offered to them through MCOs since 
										their affiliation with MCOs is directed by their employers/sponsors.</p>

										<p>Diversification in network configurations has been orchestrated by the product selection offered by managed care 
										plans. Nowadays, health plans are comprised with multi-product health benefits firm which offer a wide selection of
										products with finer and better quality meeting consumers’ taste and preference.  As shown in Figure 5, health plan 
										providers effectively create and offer an array of products that target to match the purchasers' preference when it 
										comes to benefits, financing and delivery system designs. Moreover, managed care organizations negotiate with different 
										provider networks or network configurations in terms of payment methods and participation for the availability of
										products and services. This product diversity results in the increased level of complexity for both providers and 
										consumers. Gone are those days of only high or low option product offered by insurers or only single product without
										any out-of-network benefits from HMOs.</p>
										
										</br></br></br>
										
										<h3>References</h3>
										
										<p><strong>Markets at Risk-Current and Future Challenges in a Managed Care Marketplace</strong>
										</br><a href="http://aspe.hhs.gov/health/reports/hurley/markets.htm" target="_top">
										http://aspe.hhs.gov/health/reports/hurley/markets.htm </a></p>
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